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New soda tax could complicate things for businesses

It appears that owners of restaurants, convenience stores and similar businesses in Philadelphia will soon have to begin collecting an extra sales tax on soda. The City Council there has passed a 1.5-cents-per-ounce tax on all drinks with added sugar or artificial sweetener that are sold in the city.

According to CNN, the new soda tax is scheduled to go into effect on the first day of 2017. Supporters expect it to generate $91 million in extra revenue, which will go to a variety of services, such as pre-K expansion, schools, parks and recreation centers.

A tax on sugary drinks is very rare; right now, only Berkeley, California has such a tax in effect. However, many state and local governments tax cigarettes extensively. Besides raising revenue, another purpose of these sorts of taxes is to encourage consumers to reduce or stop purchasing the product. This will theoretically improve the public’s overall health.

However, critics of the soda tax say that reducing sugar intake among Philadelphians won’t necessarily reduce the rates of diabetes or obesity. And they point out that the tax does not affect other sources of sugar, such as those naturally occurring in fruit juice.

Either way, unless lobby groups like the American Beverage Association stop it in court, the new ordinance will require many businesses in Philadelphia to collect a new sales tax and remit it to local authorities.

Currently, there is no soda tax anywhere in Maryland. But businesses that the law holds responsible for collecting sales tax could still find themselves facing complex tax problems. A tax attorney can help untangle the problem, and may be able to reduce or eliminate assessments, liens or levies against your company.

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Friday, November 18, 2016

Chaya Kundra will be a panelist at the New England IRS Representation Conference on Preparer Penalties.

Preparer Penalties: Everything You Need to Know! Over time the IRS has increased its focus from individual taxpayers to tax preparers. When the IRS identifies a pattern of false or fraudulent returns, it does not hesitate to impose penalties on the return preparers. This panel will walk you through the various penalties and what preparers need to know to protect themselves.

Moderator: Amanda Evans, Green & Sklarz LLC, New Haven, CT

Panelists: Chaya Kundra, Kundra & Associates, Rockville, MD, Barbara Kaplan, Greenburg Traurig, New York, NY

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